FROM PAGE 12

he added.

Bangladesh sought $1 billion from the ADB. The Manila-based multilateral lender’s board has already approved $250 million for social safety net programmes, while the approval for $750 million is expected in the middle of this month.

Of this, $300 million will carry a 2 percent interest rate with a 15‑year repayment period. The remaining $450 million will be market‑based, linked to the SOFR rate (currently 4.13 percent), repayable over 18 years with a three-year grace period.

Of the $1.2 billion pledged by the WB, $700 million will come from the Rapid Response Option (RRO), which allows countries to quickly repurpose and use up to 10 percent of their undisbursed amounts of existing loans to address emergency needs during a crisis.

As of July 1, last year, the undisbursed amount from the WB stood at $9 billion. The interest rate for loans under RRO is less than 2 percent.

Discussions are also ongoing for an additional $500 million subject to conditions related to revenue administration and the banking sector.

Bangladesh also sought $500 million in budget support from JICA. The loan may carry an indicative interest rate of 3.05 percent, repayable over 30 years with a 10‑year grace period.

Negotiations are underway with the AIIB and the OFID for $350 million in co‑financed budget support under ADB arrangements.

Both loans are market‑based: AIIB’s carries a 5.08 percent interest rate with repayment over 35 years, including a five‑year grace period, while OFID’s carries 3.62 percent interest with repayment over 18 years, including a three‑year grace period.

Bangladesh has also sought emergency support from the IMF. In addition to $1.3 billion from two instalments of its $5.5 billion loan programme, the government has requested $2 billion from the IMF’s emergency support window for June.

The low domestic revenue mobilisation inevitably forces the government to seek foreign loans when budgetary spending pressures rise, said Selim Raihan, executive director of the South Asian Network on Economic Modelling.

The new government inherited many accumulated problems, and on top of that, it has had to spend heavily on fuel imports since taking office.

“So, the current government’s predicament is well understood,” he said, while cautioning against wastage and corruption of the emergency funds as in the past.